Oireachtas Joint and Select Committees

Wednesday, 22 November 2017

Joint Oireachtas Committee on Transport, Tourism and Sport

General Scheme of the Irish Aviation Authority (Amendment) Bill 2017: Discussion

10:00 am

Mr. Ronan Gallagher:

I will draw a distinction, because the Bill before us is about security and the maps is a safety issue. I may touch on it in so far as I can give some extra information, and if there is an opportunity to come back with follow-up information I will agree to do so. With regard to the impact on consumers using Dublin Airport and other airports, the Government considered a number of options with regard to how this important service would be funded. There is always the option that the Exchequer and the taxpayer fund it directly.

What has become common in regulation in Ireland is the application of an industry levy. In many respects, the largest regulated entity envisaged under this would be DAA, primarily because of the extent of the activity.

Probably three quarters of the estimated cost of providing this security regime, €1 million, will fall to the DAA. That means €700,000 from a company that has an annual turnover of €700 million and after-tax profits of €100 million. It is a regulated entity. The Commission for Aviation Regulation, the economic regulator, will take all its costs into account in terms of the fees. In principle, if one charges a company an extra fee, whatever it might be, there is always the possibility that it will feed through to the consumer. On a relative scale, that will be pretty minimal. In the context of competition at the airport and the deals the airlines do with the DAA, I would not expect any material impact on the cost to the consumer using Dublin Airport. Against that, there is always an open question as to who should pay. At present, since the IAA absorbs the cost, the costs fall disproportionately on the airlines. Much of the security activity happens at the airports so it is probably spreading in a more fair way the cost of providing the security regime.

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